Starting a New Business
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Starting a new business is a complex undertaking. Statistics
reveal the majority of new businesses fail. All new
businesses need a business plan. The plan should detail the
type of business, the marketing plan and the projected growth
rate. The most important aspect is the financing and cash
flow needs. All projected startup costs should be listed and
a cushion or reserve should be established. It is not uncommon
to over-project revenue or sales the first year or two. If you
are fortunate enough to exceed sales projections an increase in
cash needs will be necessary if receivables are on terms. If
receivables are on terms you can be assured most accounts will
pay late.
Therefore financing is extremely important to support the
company needs. Develop a relationship with a bank where
these concerns trigger appropriate borrowing. The lack of cash
flow has forced many companies to fail even when all other
consideration & expectations have been met.
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